SOLUTION: Determine the present value of a series of 36 monthly payments of $5,000 each which begins 1 month from today. Assume interest of 18 percent per year compounded monthly.

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Question 1173379: Determine the present value of a series of 36 monthly payments of $5,000 each which begins 1 month from today. Assume interest of 18 percent per year compounded monthly.
Answer by Theo(13342) (Show Source):
You can put this solution on YOUR website!
you can use the financial calculator at

inputs to this calculator are:
fv = 0
np = 36
pmt = -5000
ir = 18/12 = 1.5
payment at end

click on pv to get:
pv = 138,303.42

your time periods are in months.
np = 36 months
ir = interest rate per time period.
you takre 18% per year and divide it by 12 months to get 1.5% permonth.
payments are normally made at the end of each time period.
that's why payment at was set to end.
pmt is payment per time period.
it is negative to make the present value positive.
if it was positive, the present value would be negative.
that's a cash flow convention that doesn't impact the absolute value of the results.
you would get the same present value, only negative, if you entered the payment per time period as positive.

here's a display of the results from using the online calculator referenced above.